CBDT Notifies New Form 16 and 24Q for Detailed Report of TDS

The Central Board of Direct Taxes (CBDT) has notified amendments in Form 16 — which acts as certificate for tax deducted at source (TDS) —and Form 24Q — quarterly TDS statement for salaries. The new forms require taxpayers to provide more details related to bifurcation of exemptions under Section 10 of the Income Tax Act, various deduction under Chapter VI-A, disclosure of standard deduction amount and other income.

Section 10 covers several tax-free allowance as part of the salary, including leave travel, uniform, travelling and house rent. The I-T Act requires every employer to issue a certificate furnishing details of salary along with the tax deducted at source of its employee in Form 16. Also, a comprehensive statement furnishing detail of salary and tax deduction for all the employees is required to be filed with the I-T department by the employer on a quarterly basis in Form 24Q.

With these amendments, deductions under 80C, 80CCD, 80E and 80G would have to be disclosed separately whereas they were clubbed together earlier. The amendments would ensure that the these forms are in parity with latest changes made in I-T return forms such as disclosure of standard deduction and exemptions claimed under Section 10, Sanjoli Maheshwari, director at Nangia Advisors (Andersen Global) said.

These specific disclosures would make it easier for tax authorities in understanding a taxpayer’s salary components, facilitating more precise scrutiny.

Also, given that the I-T department relies on employer to make accurate disclosure, these amended forms would bring more accountability on part of the employers.

“It is now mandatory for employer to furnish Permanent Account Number (PAN) of the lender (other than the financial institution) in case where the employee has taken loan for house property and claimed deduction for interest paid. This will further help in identifying any fabricated transaction undertaken with an aim of tax avoidance,” Maheshwari said.